LNG market development – one of core businesses


The Gazprom Board of Directors took note of the information concerning the Company's marketing policy in the international markets of small- and large-scale LNG supplies.

It was pointed out that the LNG sector was a flexible means of optimizing the Company's trading portfolio and that the LNG marketing development represented one of the Company's core businesses.

LNG market development – one of core businesses
LNG market development – one of core businesses

LNG tanker being loaded with LNG at Sakhalin LNG plant

Having entered the LNG sector in 2005, Gazprom has sold 148 LNG cargoes to 12 countries, constantly expanding its area of operations and building up supplies. In 2007 Gazprom acquired the majority stake in the Sakhalin II project, under which Russia's only LNG plant was commissioned in 2009. By developing the LNG sector, the Company expanded the range of available markets and increased its hydrocarbon export.

The current state of the global LNG market features a sustainable growth in demand by an average of three per cent a year. The positive trend may be observed, in the first place, in premium fast-growing Asia-Pacific markets. In addition, Gazprom is interested in the emerging markets of South-East Asia, South America and Middle East as well as the European markets beyond Russian gas pipeline supplies.

Against this background, in order to enhance its large-scale LNG business, Gazprom will be focused on marketing gas from new projects. In particular, the Company is looking at the possible ways to increase its supplies from the Sakhalin II project through addition of a third production train. The LNG plant in Vladivostok started selling its gas and the Baltic LNG project is under development. A gradual increase in LNG output will allow Gazprom to seize a 15 per cent share in the global market by 2030.

Small-scale LNG production and supply is an important component of the Company's LNG marketing policy. Taking into account the efforts aimed at reducing emissions and optimizing the conventional fuel costs, low-tonnage LNG is becoming a viable alternative to conventional energy sources. Its use as a vehicle and bunker fuel, in power and heat generation as well as at industrial and municipal enterprises, offers such essential advantages as economic efficiency and environmental safety.

Gazprom's marketing policy in small-scale LNG supplies provides for the fullest coverage of all the consumer groups and building a regular client portfolio to secure the sales.

With a view to promote LNG use as a vehicle fuel, Gazprom particularly develops the cooperation with major European commercial and private vehicle manufacturers as well as large retail companies possessing vast vehicle fleets. In addition, the Company is committed to developing the port infrastructure in the regions where LNG is used as a marine vehicle fuel as well as to cooperating with the housing and utility sector, small and medium industrial consumers.

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